October 2011 Archives

Yesterday on Fareed Zakira's CNN program, Harvard Business Historian Niall Ferguson accused Columbia University Economist Jeffrey Sachs of demagoguery because of the latter's endorsement of the Occupy Wall Street movement. Ever the shill for right-wing monied interests, Ferguson bravely came to defense of his ideological patrons and claimed that Sachs was attempting to criminalize the conduct of the 3 million plus "masters of the universe" who now comprise that top %1 of the U.S. wage earning population.

Other than bombast and a kind of condescending "Let them eat cake" hauteur, Ferguson was unable to effectively counter Jeffrey Sachs's mastery of the economic data. Instead, Ferguson reached in the right-wing grab-bag of boogeymen and disingenuously claimed that teachers unions were somehow the reason for the increasingly limited social mobility of millions of Americans.

Ferguson's accusation of class warfare parallel those of other right-wing pundits and commentators. For example, also yesterday in a opinion column, Ross Douthat wrote an op ed column in the New York Times in which he, too, claimed that it is the government, including the pubic education system, and not the rapaciousness of the rich that is responsible for the current economic malaise.

The evidence, of course, is to the contrary, as these paid charlatans know well. As early as 2004, a study for the Council of Foreign Relations by Sharon Otterman cited research by a Boston-based consultancy group, Forrester, which estimated that 400,000 service jobs had been lost to offshoring since 2000 and that this trend had then accelerated to between 20,000 and 40,000 a month. The number of jobs lost was over and above the 2 million manufacturing jobs that were estimated to have moved offshore since 1983. By 2015, Forrester predicted, approximately 3.3 million service jobs will have moved offshore, including 1.7 million "back office" jobs such as payroll processing and accounting, and 473,000 jobs in the information and technology industry.

The Internal Revenue Service and the Congressional Budget Office reported last week that the top 1% of the American population continued to receive a disproportionate share of the country's wealth. In 2009, the 1.4 million who belong to the top 1% made an average of $1 million dollars in 2009. Further, since 1979, the share of U.S. Income enjoyed by the top 1% has increased from 9.18% to 17.9% as of 2009, or more than the entire bottom half of the U.S. population. This data must be viewed within the context of Forbes magazine. It reported in reported that, as of last month, the four hundred richest Americans enjoyed a combined worth of $1.53 trillion, which figure had increased from 1.37 trillion over the previous year. Their combined wealth was thus approximately equivalent to the GDP of Canada.

Almost simultaneously, the U.S. Census Bureau announced last month that the real median household income in the United States had declined to $49,995, or 2.3% from 2009 , while the nation's poverty rate had increased to 43.569 million people, or 15.1 of the total population, and the number of people without health care insurance had grown to 49.9 million.

The final coup de grace to the right-wing lies and distortions is provided in study by a German think tank, Bertelsmann Stiftung, entitled "Social Justice In The OECD- How do the Member States Compare?" In a survey of 30 member states that belong to the organization for Economic Cooperation and Development, the study found that the United States ranked at number 27, just above Greece, Chile and Mexico in categories that measured from overall social justice, to overall poverty, child poverty, senior citizen poverty, income inequality, pre-primary education and in health care.

The incontrovertible economic evidence from dispassionate observers shows that, since the advent of the Reagan era, the adoption of deregulation and free-trade has been an unmitigated nightmare for the overwhelming majority of Americans. For that reason, it is easy to understand why the financiers, the hedge-found traders, the U.S. Chamber of Commerce and their hired apologists for the status-quo continue to peddle the myth first propagated by Ronald Reagan that government is the problem and not the solution.

In the current political climate, the wealthy, the corporations and their legions of lobbyists, think-tanks, spin-doctors and academic courtesans rightly fear an honest discussion about the current state of the American economy. They know that if the American public finally grasps the implications of the facts and the data, the message of the Occupy Wall Street movement will resonate ever more loudly and that an overwhelming majority will come to understand that the historic movement of America toward a more responsive, inclusive, egalitarian democracy has been hijacked by a cabal of cheaters, thieves, miscreants and malefactors who have turned our government and our economy into playthings for the 1%.

The top 1% have waged an unrelenting class warfare against the rest of this country for the past thirty years. If the promise of America is to be reclaimed, their failed nostrums about deregulation, laissez-faire, and need for less government must be rejected and replaced be a new narrative which recognizes, in the words of Thomas Hill Green, that government must be viewed as a positive instrument for the public good.

Ever since the nascent Occupy Wall Street first emerged a few weeks ago, its supporters have been subjected to an unrelenting campaign of criticism about their motives and tactics by the usual cabal of right-wing ideologues, critics and pundits who have suggested darkly that the movement, including its offspring in Boston, San Francisco and elsewhere throughout a myriad of cities in this country, is, if not subversive, at very least a stalking horse for the Obama administration. Left unsaid, of course, is any acknowledgment that Occupy Wall Street is a spontaneous movement of those who are have been left behind as road kill and victims of the excesses of unregulated capitalism. In addition, one searches in vain for any admission that the Tea Party movement, by contrast, is a wholly owned subsidiary, created by Fox News and funded by Grover Norquist and the infamous Koch brothers.

Why are the right-wing and their GOP apparatchiks worried by the Occupy Wall Street movement? Part of the answer, in stark illustration, was revealed this past Sunday on the CNN program, "Fareed Zakaria GBS." Present on the panel to discuss the Occupy Wall Street phenomenon were Steve Forbes, the chairman and editor-in-chief of "Forbes Media," Nobel prize-winning economist New York Times' columnist Paul Krugman, Bret Stephens, a deputy editorial page editor for the Wall Street Journal, and Chrystia Freeland, the global editor-at-large at "Reuters."

At the very outset of the program, Fareed Zakaria asked Paul Krugman why he had written favorably about the Occupy Wall Street movement. In response, Krugman stated, "We...are just three years after the greatest banking crisis since - since the 1930s, and it was brought on by excesses on the part of the financial industry, and the financial industry was bailed out at the public's expense and risk. And yet we're still in an economic crisis. And somehow, all of that, the discussion of who are these guys, why are we supporting them, why haven't they paid more for this, what are the reforms that's going to stop this from happen again, all of that disappeared from the debate. We're been arguing about who's going to cut social - social security and - and what about that budget deficit, and we lost the whole thread of the - the core issue at our - in our society right now.And these protesters, who are a mix of all sorts of people, suddenly brought that back into the center of our - of our national debate. And, just for that, that's an enormously positive contribution."

Steve Forbes then retorted: "I think the crisis, and this is where I wish the protesters would go against the Fed instead of Wall Street. If the Federal Reserve hadn't been on such an easy money path in the early part of the last decade, which dragged the central banks with it, you'd not - would not have had a housing boom and bust. The juice would not have been there for it. So you get monetary policy right, and a lot of the excesses you see as a result of that would have gone away, whether it's artificial winners like Wall Street and commodities, or artificial losers in other sectors of the economy. It's very, very disruptive when you deliberately weaken a currency."

In frustration, Krugman observed, "... But, you know, first of all, I think that this is ...a really kind of desperate effort ...to change the subject, right? We know about the bankers. We know about how much money we need. We know about the - the packaging of seemingly - of what were in fact bad loans as AAA assets, which suddenly turns into toxic waste. And now, all of a sudden, you're saying that it was Alan Greenspan doing it. Well, you know, I'm no fan of Greenspan's, but, you know, a financial system that depends on always having the perfect leadership at the central bank is a financial system that is doomed to failure. Monetary policy is always less than optimal. What we had was a financial system that, thanks to deregulation, thanks to financial developments that had bypassed the existing regulations, was far more fragile than it used to be, far more prone to abuse. And those are the abuses we need to - to have a reckoning about."

Bret Stephens, ever the dutiful sycophant, chimed in with his support for Steve Forbes twisted interpretation of economic reality: "Well, the crisis also has a lot to do with the political allocation of capital, thanks to Fannie Mae and Freddie Mac and various government interventions on behalf of various kinds of not only lenders but borrowers. But I want to just push back on another point. Before you sort of make - assert the premise that this is a populist movement that's taking place on Wall Street, I lived down there. I don't know if any of you have actually gone to Zuccotti Park and chatted with - with some of these guys. This is not populism, this is maybe anarchism or something entirely - entirely different, but what you don't find down there is sort of really a populist movement. You find sort of 9/11 truthers, you find people - by the way, take down the Fed is one of the - is one of the slogans of - of some of these people."

Paul Krugman then explained why the Occupy Wall Street movement is important and why the subject - its message - should not be deflected by the disingenuous custodians of the status quo: " I say that this is ... again, why we need an Occupy Wall Street because, you know, from my point of view - and I've said this many times - people like Steve ... are recapitulating 80- year-old economic fallacies, they're hijacking this whole discussion on the - on the eve of the greatest failure of those conservative policies that we can possibly imagine, somehow making the - the problem - the case that - that the problem was we weren't conservative enough. But, because of the way our normal discussion is structured, because of who has access to - to megaphones, because of who ends up dominating debates in Congress, the other side which said, hey, wait, the problem is not that we're doing too much, we're not - the problem is that we're not doing enough, got practically squeezed out of the debate. And thank God a ragtag group of protesters down in Zuccotti Park and elsewhere, had made us go back to hey - saying hey, wait, you know, what - what is the problem here? Shouldn't ... we be doing more?"

To his credit, Krugman understands that before solutions to existing political and economic policies can be posed and agreed upon, those who benefit from the existing status quo must first be identified and the magnitude of the problems that they have created needs to be placed in perspective. This is the reason why the Occupy Movement resonates: The protestors have correctly identified those who have benefited the most from the current system - the 1% who control most of the wealth of this country - and they have placed in perspective the magnitude of the problem - viz., that, because of their collective wealth, the wealthiest 1% are able influence and shape public policies that have redounded to the detriment of the remaining 99% of the population.

George Orwell understood as well as any writer the proposition that he who controls the narrative - and the choice of words employed in the narrative - controls the public policies that are crafted in response to the narrative. This phenomenon has played our many times in recent American history. Consider the debates about whether a tax policy should be characterized as a "death tax" - which conjures up an image of poor mom and dad - or an estate tax - which immediately reminds us of a British Lord hunting for fox on his manor. Similarly, the use of the phrase "death panels" by the Tea Party and its Republican supporters in 2010 was intended to evoke the image of Nazi death camps during World War II.

During the past forty years, the financiers and their right-wing supporters have subverted the U.S. economy and turned it from a productive, goods-producing engine of upward mobility for millions of Americans into a casino in which unproductive hedge fund millionaires and stock traders who fiddle with algorithms and computer-driven trading programs all day long are rewarded with vast amounts of income that are taxed at a rate significantly lower than those who labor in the increasingly lower wage service economy serving fast food and who are forced to cobble together two or more part-time, minimum wages jobs to try to make ends meet.

The Occupy Wall Street movement has posted the stark warning for everyone to see: Without serious and immediate structural reform that instills hope and creates meaningful opportunities of all Americans, Thomas Hobbes' dystopia will become the American nightmare. Millions of our fellow citizens already lead lives of solitary desperation impoverished by circumstances beyond their control.The 1% - unless they begin to comprehend that all of destinies are inextricably linked to one another - may very well condemn their own children and grandchildren to lives of misery and degradation.

The protestors at Occupy Movements across this land perform an invaluable service. They remind us that our government no longer serves the public interest, but has become a plaything of the rich, the powerful and the well- connected. When that message with all of its implications is fully grasped the winds of change will assume hurricane force.